US Households Face Record Delinquencies Amid Rising Debt Burden

The financial strain on American families has intensified, with the proportion of households falling behind on loan payments reaching its highest point since 2010, according to new data from the Federal Reserve. The latest Survey of Consumer Finances, covering the period from 2022 to 2025, reveals a substantial jump in delinquencies, indicating a deepening debt crisis.

In 2025, 20 percent of American families reported being behind on their loan payments, a notable increase from 12 percent in 2022. The number of families delinquent by two months or more also climbed significantly, exceeding eight percent, up from five percent three years prior. This marks the most challenging period for households meeting their financial obligations since the survey in 2010, which captured the aftermath of the Great Recession.

While the overall household debt balances are approaching levels seen after the 2007-2009 economic crisis, the picture of American finances is complex. The survey indicates a slight narrowing of the wealth gap between richer and poorer households, with inflation-adjusted average net worth rising seven percent to $1.24 million. However, median net worth, a more representative measure for the typical American family, saw a more modest increase of just two percent, reaching $215,900.

This disparity in wealth gains is further highlighted by trends among different age groups. Households headed by individuals under 35 experienced a significant decrease in median net worth, plunging 23 percent to $33,000 between 2022 and 2025. In contrast, older Americans, particularly those aged 75 and above, continued to build wealth, with median net worth for this group increasing by 37 percent to nearly $505,000.

The proportion of families dedicating more than 40 percent of their income to debt payments also rose to 8.6 percent in 2025, the highest level recorded since 2013. Despite these pressures, consumer spending has remained resilient, with U.S. household spending increasing by 6.1 percent in the 12 months leading up to August, partly due to higher prices and increased purchase volumes.

Younger generations, specifically Gen Z, are showing increased reliance on credit card debt and buy now, pay later services. A recent Deloitte survey found that the share of Gen Z borrowers carrying credit card balances for over a month rose by nearly 20 percent between late 2023 and mid-2026, while their use of buy now, pay later services peaked at 22.8 percent in early 2026.